Administrative
Report
H.19., File # 23-7232 Meeting Date: 11/21/2023
To: MAYOR AND CITY COUNCIL
From: SEAN SCULLY, ACTING COMMUNITY DEVELOPMENT DEPARTMENT DIRECTOR TITLE
APPROVE THE FOURTH AMENDMENT TO THE REIMBURSEMENT AGREEMENT WITH SOUTH
BAY CENTER SPE, LLC FOR ADDITIONAL CITY REVIEW TO EXAMINE WHETHER THE GALLERIA EXPANSION PROJECT EIR CERTIFIED BY CITY COUNCIL IN 2019 NEEDS FURTHER REVISION IF THE DEVELOPER PROPOSES TO BUILD THE ADDITIONAL 350 RESIDENTIAL UNITS THAT WERE STUDIED IN THE 2019 EIR BUT NOT INCLUDED IN THE 300-UNIT PROJECT ALTERNATIVE APPROVED BY CITY COUNCIL IN 2019
EXECUTIVE SUMMARY
The South Bay Galleria (South Bay Social District) renovation project is nearing completion of the building permit plan check process for Phase 1A (existing mall renovations and development of a great lawn and skate park) and Phase 1B (300 residential dwelling units - apartments with ground floor commercial). Phase 1C (hotel) of the entitled South Bay Galleria redevelopment project is still in the design process with a plan check submittal date yet to be determined.
As a next step (Phase 2), the South Bay Center SPE, LLC is investigating the potential for an additional 350 residential units at the development site, which was contemplated and studied in the 2019 Environmental Impact Report (EIR), but was not included in the 300-unit alternative approved by the City Council in 2019.
In order to accommodate this review, an amendment is needed to the agreement between the City and the Developer (South Bay Center SPE, LLC) to increase the amount of authorized costs reimbursed to the City by $28,000.
BACKGROUND
The South Bay Galleria property owners are currently in the pre-construction execution phase (plan check and permitting) of their planned and approved redevelopment of the South Bay Galleria site.
The approved development required the preparation of an EIR and additional staff and legal resources to review and process, and was ultimately approved on January 15, 2019.
On December 16, 2014 the City Council approved a contract with Environmental Science Associates (ESA) that included the full scope of project services including public scoping, EIR preparation and circulation, responses to comments, and Final EIR delivery. Along with their approval of the environmental services contract with ESA, the City Council also approved a corresponding reimbursement agreement with the project developer, South Bay Center SPE, LLC (Developer), which provided for the full cost reimbursement of all anticipated consultant, legal, and staff costs
H.19., File # 23-7232 Meeting Date: 11/21/2023
associated with the environmental review for the project.
Through the review and approval process of the project, the City and the Developer entered into five amendments to the environmental services contract with ESA and three amendments to the Reimbursement Agreement. The final amendments to the environmental services and Reimbursement Agreement were approved by the City Council on December 19, 2017. Below is a breakdown of the total amount of the consulting services associated with the Project.
EIR Preparation - ESA $926,147
CEQA Legal Consultant - Sohagi Law Group $450,000
City Administrative Costs $206,422
Total $1,582,569
All contract costs noted above for the South Bay Galleria Project have been fully reimbursed to the City pursuant to the terms of the Reimbursement Agreement with South Bay Center SPE, LLC.
The proposed Fourth Amendment to the reimbursement agreement between the City and the Developer would increase the amount of the authorized reimbursable costs by $28,000 to account for additional City review to determine whether the Galleria expansion project EIR (certified by City Council with the original approval of the project in 2019) would need further revisions if the Developer were to add back the additional 350 residential units to the Project which were contemplated and studied in the 2019 EIR but not included in the ultimate Project approval.
COORDINATION
The Community Development Department coordinated the preparation of the recommended Amendment to the Reimbursement Agreement with the City Attorney’s Office.
FISCAL IMPACT
The costs associated with the City’s additional review to determine whether the Galleria expansion project EIR (certified by City Council with the original approval of the project in 2019) would need further revisions if the Developer were to add back the additional 350 residential units to the Project are estimated not to exceed $28,000, and will be fully reimbursed to the City pursuant to the terms of the Reimbursement Agreement with South Bay Center SPE, LLC.
APPROVED BY:
Mike Witzansky, City Manager
ATTACHMENTS
· Fourth Amendment to Reimbursement Agreement South Bay Assoc SPE · Agmt - Third Amendment to Reimbursement Agreement Galleria, December 19, 2017 · City Council Administrative Report Third Amendment-Reimbursement Agreement, December 19, 2017
· Agmt - Second Amendment to Reimbursement Agreement, March 21, 2017 · City Council Administrative Report Second Amendment-Reimbursement Agreement, March 21, 2017
· Agmt - First Amendment to Reimbursement Agreement, April 5, 2016
H.19., File # 23-7232 Meeting Date: 11/21/2023
· City Council Administrative Report First Amendment-Reimbursement Agreement, April 5, 2016 · Agmt - Reimbursement Agreement with South Bay Association December 16, 2014 · City Council Administrative Report Reimbursement Agreement, December 16, 2014